Ukrsotsbank’s Cost/Income surges to 64% in 2Q12



23 июля 2012 года
Конкорд Капитал

Рекомендация: USCB, Укрсоцбанк, — держать


Ukrsotsbank (USCB UK) posted net income of just USD 0.2 mln in 2Q12, according to data released on Friday. The bank’s net interest income declined 10% yoy in 2Q12, mainly on contraction in net loans (-6% yoy) but the decrease was to a large extent compensated by growth in net fees and commissions (+33% yoy). Nevertheless, pre-impairment profit dropped 44% yoy on surging operating expenses (+62% yoy). In line with earlier practices, the bank allocated nearly all of its pre-impairment profit to loan loss reserve. Assets remained virtually unchanged, both in quarter-on-quarter and year-on-year terms.

Ukrsotsbank's 2Q12 and 1H12 results, USD mln
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1H12 yoy 2Q12 qoq yoy
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Net interest income 164 -9% 81 -1% -10%
Net fees and commissions 37 25% 20 19% 33%
Operating expenses -110 34% -67 55% 62%
Pre-impairment profit 100 -29% 38 -38% -44%
Impairment charge for credit losses -97 -27% -36 -40% -43%
Net income 1 -14% 0.2 -42% -50%
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1H12 qoq yoy
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Assets 5,004 -1% 0%
Gross corporate loans 2,363 -2% 0%
Gross retail loans 2,282 0% -4%
Loan loss reserve -1,073 3% 14%
Liabilities 4,199 -1% 0%
Corporate deposits 739 -7% 9%
Retail deposits 1,378 -1% 6%
Equity 805 -2% -3%
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Source: Company data

Olena Zuikova: The reported 62% yoy upsurge in operating expenses in 2Q12 was a negative surprise – it pushed the bank’s Cost/Income ratio to 64% from 38% in 2Q11. We aim to clarify what caused the sharp growth in costs, but anyway we doubt the bank will manage to normalize its Cost/Income back into the 35-40% range (which has been the norm for the bank for the last three years) any time soon. Another concern about the bank is low provisioning of bad loans – the bank’s loan loss reserve (LLR) reached 23% of gross loan book by end-1H12 while NPLs (loans past due by 90 days or more) are hovering at mid-30%. Overall, we do not expect the bank will return to a decent profitability level earlier than in 2015. We maintain our HOLD recommendation on the stock.

Источник: Конкорд Капитал

Аналитик: Алёна Зуйкова


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